CNBC’s Jim Cramer said on Wednesday that a market bounce is possible if the current biggest headwinds, the Russian-Ukrainian crisis and soaring inflation, are eased.
“For the market, this is a war on two fronts: in Ukraine and on the one where the business is now in trouble if it does not raise prices aggressively … Neither one nor the other is unsolvable,” said the Mad Money host.
“We have a break in any of these events – inflation or Russian aggression – then you get a rally of incredible proportions, a rally we haven’t seen since 2020 when kids stopped playing Call of Duty and started day trading,” he later added. .
Cramer’s comments on Wednesday came after the S&P 500 fell further into corrective territory, ending the session almost 12% below its all-time closing high on Jan. 3. It was the fourth consecutive negative session of the broad stock index in a row, while the Dow Jones Industrial Average and the high-tech Nasdaq Composite registered five-day losing streaks.
Wall Street and markets around the world are reeling as investors watch Russian aggression against Ukraine. In recent days, Russian President Vladimir Putin has ordered troops into eastern Ukraine, and US and European officials have responded by imposing economic sanctions.
At the same time, rising inflation continues to plague the US economy, and in response, the Federal Reserve is expected to raise interest rates by a quarter point in March. The market expects further growth during the year.
If none of the problems are resolved, the market could face tougher times, Kramer said.
“If the West doesn’t win the war of words with Russia or Powell doesn’t beat inflation, you will have to expect more from these tormented days and fewer tormented young traders,” he said.